Enterprises: Embrace open source development or go extinct

A Forrester analyst warns that enterprises must evolve their IT systems of record into systems of engagement which allow customers, partners, suppliers and machines to engage seamlessly with corporate data -- or fall prey to digital upstarts.

Enterprises must embrace open source web technologies and development paradigms quickly -- or possibly face extinction.

That's a stern warning from a Forrester Research principal analyst, who contended during a webcast yesterday that the rate of innovation inspired by open source development is accelerating at such a dramatic pace that it could threaten the livelihood of any business that sits on the sidelines.

Jeffrey Hammond, principal analyst at Forrester, said much of the technological underpinnings of organizations that are revolutionizing their respective industries -- the way Amazon has altered publishing, LinkedIn has changed recruiting and NetFlix put Blockbuster out of business -- is built on open source, the cloud and software-as-a-service.

And the three are not mutually exclusive. According to Black Duck Software, which sponsored yesterday's webcast, "Mobility and the Open Web: Open Standards and Collaboration Redefine Enterprise IT," the number of mobile open source projects (and open source AGPL licensing, which governs cloud development) has been growing dramatically.

More than 10,000 new open source projects -- many dealing with application development -- were created in 2011, Black Duck Software reported.

Open source is changing the world and enterprises must change their IT strategy dramatically to compete, Forrester maintains.

"The traditional barriers to entry -- especially technology-based -- are eroding very quickly," Hammond said, noting that the old 10-year product cycle has been replaced by speedy innovation and the capacity of digital startups like the 13-employee Instagram to achieve a billion dollar market capitalization in no time at all, with little if any investor funding or internal resources.

Cost of innovation

Why? The cost of software innovation is about 90 percent less than in years past, he noted.

"Open source more than anything else has dramatically reduced the cost of innovation .... it lets bright people stitch [open source alternatives]together and create a resulting [software]service that scales readily without additional licensing costs.

All of the big trends -- big data, explosion in development tools and mobile frameworks -- demonstrate this and the quick shift in power away from traditional software suppliers to consumers and their developers.

"Rapid innovation and rapid integration are changing the way folks outside the firewall are thinking," Hammond said, noting that application development in the consumer space for mobile devices, such as iPhones, iPads and Android devices -- is leading the way but leading-edge corporations are following suit.

Developers no longer think of themselves as pure .NET or Java developers. Rather, they identify as polyglots -- developers who harness the best language for specific web applications, and many of them are open source, Hammond said.

Hammond estimated there could be as many as 1 billion smartphones in operation by 2016, or as early as 2014, and thousands of startups using new mobile, cloud and open source technologies such as HTML5, web APIs, public and private cloud platforms and open source communities -- to send established companies the "way of the dodo bird."

"Digital upstarts are using this [ready made] data center to compete with you," Hammond said, advising enterprises -- developers inside the firewall -- to jump on the bandwagon or risk obsolescence.

"We are seeing a shift in the center of gravity among development away from isvs and corporations and to communities that form around open source projects ... [it's the] github generation, the eclipse generation. Vendors are still important but they're moons encircling the planet, which is the community. They are not the center of gravity themselves."

The good news is that enterprises don't need the throw out their existing infrastructure or adopt a separate mobile strategy but "consider evolving systems of record and building on top of that a multi-channel strategy" from which multiple devices can access data.

Systems of engagement

That is, traditional companies must evolve their systems of record -- legacy databases etc -- into systems of engagement, which allow customers, partners, suppliers and machines, such as tablets, to engage seamlessly with enterprise IT. "Traditional companies are not ISVs [per se]... they're becoming solution providers and service providers."

Hammond pointed to companies innovating around this multi-channel concept such as Nike, which is spawning its own ecosystem of developers around its running software platform, and CBS Sports, which is exposing its Fantasy Football data to third party providers -- to build its Internet platform. Sears is doing the same, he noted.

IT organizations will continue to support and manage historical data "at rest" in SAP and CRM systems and those aren't going to change substantially, he said. What must evolve is a commitment to "provide data in headless form" in a new class of systems engagement platforms.

"Enterprises need to focus on development [and] how to attract the github generation and high performance development culture."

How should enterprises go about creating these new systems of engagement?

1. Begin by dividing the development organization by systems of record and systems of engagement.

There are two different development processes and two different sets of tools to get each respective parts of the job done, Hammond said. Customers expect data and application updates to be released three to four times per year.

2. Engage in open source projects. "A lot of people said we'd never contribute back to open source projects but [if you remain this way] you risk becoming extinct," Hammond said.

3. Adopt a multi-sourcing software model and a platform that mixes proprietary and open source software.

"From an enterprise [standpoint], you need to lower your cost of innovation and deploy prototypes to compete against digital upstarts or you risk becoming the next Borders or Blockbuster. It's happening in telco, retail and finance. You're at risk no matter what industry you're in," Hammond advised. "You can't lower your cost of innovation unless you take advantage of some of these technologies."

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